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Executive Education

TRANSFORMATION OF ORGANIZATIONS - HR AS A LEVER FOR CHANGE

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Change creates psychological resistance, due to natural human fears of the unknown. In fact, studies show that, on average, two thirds of a company’s population will fear change. Associate Dean Nathalie Lugagne explains that, in the face of such resistance, HR can be a crucial lever for implementing change.

 

Based on a discussion with NATHALIE LUGAGNE, Associate Dean in charge of Executive Education and Affiliate Professor in Management and Human Resources, HEC Paris.

WHY IS TRANSFORMATION AN IMPORTANT ISSUE FOR HR? 

While there is nothing new about change, the accelerating pace of change is becoming more compelling. There is now a common understanding that, to thrive amidst the volatility created by this new pace of change, business organizations must transform themselves to become more agile and innovative. More specifically, former, more simplistic conceptions of leaders as lone “superheroes” have given way to the new imperatives for shared leadership. 

 

One leader alone cannot achieve the breadth and depth of insight needed to navigate the uncertainty of today’s business world - as a team, however, it becomes possible.” – Nathalie Lugagne, Associate Dean in charge of Executive Education, HEC Paris.

 

Nathalie Lugagne

Nathalie Lugagne

 

When it comes to implementing this cultural change from solo to shared leadership, HR is an important lever. The pillars of shared leadership – notably, trust and empowerment – depend largely on HR policy and, more specifically, on whether or not it achieves fairness and transparency. Are rules and decisions known, shared, and communicated in consistent alignment with the company’s values? Does HR overcome the ever-present threat of cultural bias to achieve diversity in its talent recruitment, development, and retention practices? The effectiveness of HR at meeting these challenges is a key success factor in the transformation of organizations in terms of agility and innovation.

 

CASE STUDY - HR FACILITATES SUCCESSFUL TRANSFORMATION AT TOYOTA 

Toyota is renowned for its production quality expertise. From November 2009 to the beginning of 2010, however, the Japanese automaker had to recall over 9 million cars and trucks due to quality issues. At one point, the severity of the problems even caused the company to halt production and sales. 

 

In the aftermath of the crisis, Toyota’s senior leadership recognized the need for transformation. Identifying a lack of diversity within its executive leadership ranks as a contributing factor in the recalls, they enlisted HR to act as a lever for change by making diversity a more concrete priority in executive leadership recruitment and development. It is not always possible to make a straightforward connection between cause and outcome, but we can note that by 2012, after HR integrated greater diversity into the company’s senior ranks, Toyota was able to regain its position as the world’s top selling automaker.